The Prime Minister’s tale: where the government of Ukraine will get cheap gas

© RIA Novosti / Michael Palinketi in photobacteria-the Minister of Ukraine Vladimir GroismanThe Prime Minister’s tale: where the government of Ukraine will get cheap gas© RIA Novosti / Michael Palinketi the image Bank

Kiev may refuse to import gas. The Ukrainian Cabinet of Ministers Volodymyr Groysman believes that his country can in the medium term to increase production volumes of blue fuel and this will permanently lower the price of gas for consumers. How realistic are the dreams of the Prime Minister — in the material RIA Novosti.

The illusion of deception

After three or four years Ukraine will provide itself with gas. In this bright future, believes Vladimir Groisman. «Once that happens, we are at 20-30 percent can reduce the price of gas,» says the head of the cabin.

Statement of the Ukrainian Prime Minister addressed to the people, is thrilled about the upcoming sharp increase in tariffs. Scandal in the middle of last week arose because of the publication in the media of the draft resolution of the Cabinet of Ministers, providing for the introduction of a new pricing mechanism for domestic gas market.

Experts estimate that the price of fuel now reaching seven thousand hryvnias per thousand cubic meters (about $ 250), from April 1 of the current year may grow by 8.3 percent.

The government hastened to deny it. The Minister of energy of Ukraine Igor Nasalik said that the published document is not related to the increase in gas prices for the population.

To believe the official of the difficult: in October last year, the energy Ministry has published calculations according to which the price of gas would have to increase by 17.6 percent to eight thousand hryvnia per thousand cubic meters.

Ukrainians who receive an average salary of seven thousand UAH and at least a quarter of its giver to the payment of utility bills (if it is a one-bedroom flat), painfully took the news about the upcoming gas price hike. But it does not bother the head of «Naftogaz» Andrew Kobolyev. He called the rise in gas prices is good for the economy because it will bring additional revenue «to the state».

In Ukraine about 350 natural gas fields. The total proven reserves of hydrocarbon raw material, according to «Naftogaz» exceeds a trillion cubic meters. One problem — the low rates of production growth.

In 2017, production increased by 840 million cubic meters (4.5%) to 20.8 billion cubic meters. Consumed Ukraine for the year to 32.4 billion cubic meters. At that rate, in three years, production will increase from three billion cubic meters, which is clearly insufficient for the complete abandonment of import.

Vice-rector for research and technology development resource base energy Russian state University of oil and gas (national research UNIVERSITY). Gubkin Alexander Lobusev, commenting to RIA Novosti the situation, noted that the main asset of Ukraine in the sphere of gas production, shebelinske field, one of the largest in Europe, currently almost fully developed.

Yes, there are gas reserves in the so-called Dnipro-Donets basin. However, most of them lies at depths below four and a half miles and falls into the category of hard.

Interlocutor RIA Novosti questioned the fact that the implementation of these projects will find investors. «Prospects for Ukraine to provide itself with gas in the next ten years there,» says the Lobusev.

In particular, the company «Ukrgazvydobuvannya», whose share accounts for three-quarters of domestically produced gas in the past year in drilling new wells spent $ 13 billion (more than four billion dollars). In the end, the production of natural gas increased by only 650 million cubic meters. The cost of gas was above $ 300. For this money you can buy in Russia about two billion cubic metres, i.e. three times more.

This year Kyiv, after a two year hiatus, forced to resume purchases of Russian gas under direct contracts with «Gazprom». Thus, almost a third of imported fuel Ukraine will cost cheaper than the reverse supply from the EU.

To normal economic logic in December last year, Ukraine returned to the Stockholm arbitration court, is obliged to purchase from Russia up to the end of 2019 at five billion cubic meters of gas per year. KOBOLEV reiterated the readiness of «Naftogaz» to execute the court decision and resume cooperation. And the price of gas for Ukrainian consumers depends only on how carefully Kiev will fulfill the requirements of the arbitration.

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